Financing commercial solar projects

Financing a commercial solar project (SME, not utility scale) can be very complex. The following provides a rundown of the different options.

Essentially, there are 3 different financing schemes available for commercial solar projects and there is no one-size-fits-all solution to the question: “Which one is the best?”. Depending on your financial situation, the rental agreement/ownership of your building(s), your organisation’s electricity usage. the most feasible solution varies from case to case.

Below is a table which briefly explains how the 3 key financing options work, assuming you are a property owner in the UK and looking to install solar for your business.


Self-funded

Solar Loan or Debt

Solar Leasing / PPA

The PROs
  • Highest Return on Investment.
  • Resale value of property increases.
  • Ownership of solar remains with you.
  • Reduce monthly electricity expense.
  • Ownership of the system remains yours.
  • Resale value of property increases.
  • Lowest risk.
  • No capital outlay required.
  • Discounted electricity
  • Ideal for businesses looking for low-risk, sustainable energy.
The CONs
  • Capital required.
  • Maintenance of the system is required, imperative to choose the right installer and therefore a good quality product.
  • 20 - 30% capital investment may be required.
  • Creditworthiness required.
  • Maintenance of the system is required, imperative to choose the right installer and therefore a good quality product.
  • Nominal savings, in most cases around 5% to 10%.
  • Ownership of the system retained by financier, could further yield to conflicts.
  • No impact on property’s value.
Who owns the system? You You Financing company
Who should consider this option?
  • Stable businesses that have the required capital.
  • Businesses looking to maximise return on investment.
  • Businesses looking for a combination of RoI and sustainability.
  • Businesses looking to own the solar project.
  • Businesses looking for easy, zero risk sustainability solutions.
  • Businesses low on capital.
How does it influence your cashflow?
  • Significant long-term, assured energy bill savings.
  • In some cases, could also be inflation linked.
  • Short-term energy savings to offset debt repayments.
  • Savings generally continue for at least 10-12 years after debt repayment.
  • Smaller scale but zero risk energy cost savings.




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